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Wales Introduces Regulations For New Land Transaction Tax

by Jason Gorringe, Tax-News.com, London

10 January 2018


On January 8, 2018, The Land Transaction Tax (Administration) (Wales) Regulations 2018 were tabled in the National Assembly for Wales, setting out rules concerning the administration of land transaction tax, which is to be introduced in the territory from April 1, 2018, under the agreement with the UK Government for the devolution of certain taxes.

Under that agreement with the UK, Wales will introduce its own land transaction tax (which will replace UK stamp duty) and a landfill disposal tax in 2018, and personal income tax from 2019.

Under the new rates for land transaction tax (LTT), Wales will have the highest starting threshold for the property tax in the UK, of GBP150,000 (USD199,000), up from GBP125,000. All buyers of residential properties costing up to GBP400,000 will pay the same or less tax than under stamp duty land tax. The average home buyer will pay nearly GBP500 less tax than under stamp duty land tax.

For properties worth up to GBP250,000, the rate will increase to 2.5 percent from two percent, and will increase by 2.5 percent at value intervals of up to GBP400,000 (five percent), up to GBP750,000 (7.5 percent), and up to GBP1.5m (10 percent). A 12 percent rate will apply on property values above GBP1.5m.

Lower rates apply to commercial property and rates for leased commercial property will be lower still. Wales will have the lowest starting rate of tax for the purchase of business premises in the UK, with all businesses buying premises up to the value of GBP1.1m in Wales either paying no tax or up to GBP1,000 less tax than under stamp duty land tax.

TAGS: tax | business | property tax | law | United Kingdom | stamp duty | Regulations | Tax

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